DENVER (AP) — Molson Coors Brewing Co. said Tuesday that its profit fell 6 percent in the second quarter, as increased prices and cost cuts were mostly offset by lower sales volumes and higher commodities costs.
Like many brewers, Molson Coors has been struggling as consumers contend with high unemployment and difficult economic conditions. The company's core customers, men under 28, are seeing particularly high unemployment.
Those problems have been compounded by escalating fuel and ingredient costs, which are affecting nearly all consumer product makers.
The maker of beers like Coors Light, Keystone Light and Blue Moon reported net income of $222.8 million, or $1.18 per share, for the period ended June 25. That's down from $237.2 million, or $1.27 per share, a year ago.
Analysts, on average, expected earnings of $1.29 per share, according to a survey by FactSet.
President and CEO Peter Swinburn said investments made in the company's international business also pressured results.
Many companies have looked to increase their business overseas as a way to bolster their business while they deal with U.S. consumers whose spending remains conservative.
Revenue rose 6 percent to $933.6 million after excise taxes from $883.3 million a year ago, but missed Wall Street's revenue estimate of $958.5 million.
Shares of Molson Coors declined 63 cents to $44 in premarket trading.
The company said its Canadian business saw higher prices, lower marketing, general and administrative expenses and favorable foreign currency exchange rates offset by a mid-single-digit volume decline. The units also dealt with an increase in the cost of goods sold.
Results for MillerCoors, a joint venture with SABMiller PLC, improved thanks to higher prices, a solid mix of brands and cost containment efforts. MillerCoors sells both companies' brands in the U.S. and has tried to encourage the sales of some of its higher-priced niche beers.
Molson Coors' business in the United Kingdom improved due to a temporary marketing spending cut, a lower pension expense and favorable foreign currency exchange rates.
Molson Coors also said Tuesday that it will buy back up to $1.2 billion shares. The new repurchase program, approved by Molson Coors' board, is expected to span three years.